If Michael Powell is wearing a neck brace to work this week, everyone will know the cause of his injury: Political whiplash.
Powell, the Republican Federal Communications Commission chairman who tried to overhaul the media-ownership landscape with less government meddling, last week suffered two serious setbacks — one in court and another on Capitol Hill — both signaling skepticism with his stewardship.
The most stunning event since Powell pushed through the controversial rules on June 2 came last Wednesday, when a three-judge panel of the U.S. Court of Appeals for the 3rd Circuit in Philadelphia issued an order barring the FCC from enforcing the new rules just one day before they were to take effect.
Until further notice from the court, the FCC's old rules remain in force.
One day later, in a widely expected move, the Senate Appropriations Committee, under the direction of chairman Ted Stevens (R-Alaska), approved a spending bill that would bar ABC, CBS, NBC and Fox from buying TV stations that would give any of them off-air access to more than 35% of U.S. TV households.
The FCC had moved the cap to 45%, a ruling that aided CBS and Fox because both were reaching about 40% under FCC waivers.
The court stay had to sting, because Powell repeatedly stressed that the new rules were developed in part as a response to court rulings that said the FCC's old, more regulatory rules were illegal.
"While we are disappointed by the decision by the court to stay the new rules, we will continue to vigorously defend them and look forward to a decision by the court on the merits," a Powell spokesman said in a statement.
The FCC's three-vote Republican majority approved the rules over fierce opposition from the agency's two Democrats, Michael Copps and Jonathan Adelstein, who complained the rules were extreme and embraced without sufficient regard to the hundreds of thousands of letters and emails that railed against further media consolidation.
Copps, who with Adelstein had asked Powell to stay the rules while awaiting the results in court and in Congress, was delighted with the outcome in the 3rd Circuit.
"The court has done what the FCC should have done in the first place," Copps said in a statement.
Under the new rules, the commission not only allowed TV station owners to reach more of the public, but also allowed TV stations and newspapers to combine in the same local market for the first time since 1975. The FCC also made it easier for an entity to own two or three TV stations in a market, along with radio stations and newspapers.
Few anticipated the intense reaction to the new rules on Capitol Hill.
In July, the House voted to restore the 35% cap despite a White House veto. The Senate Appropriations Committee adopted 35% cap language identical to the House provision in an effort designed to ensure its survival all the way to President Bush's desk. If enacted, the 35% cap would apply for one year, but it was unclear whether CBS and Fox would need to divest stations during that period.
Even fewer people thought a court-ordered stay was coming.
"I think the conventional wisdom was that is was a long shot," said James Assey, a communications policy aide to Sen. Fritz Hollings (D-S.C.), one of Powell's harshest critics.
Maybe Powell miscalculated by not sensing the new attitude in Washington about deregulation in the wake of the Enron and WorldCom scandals.
"[Powell] is caught in one of the great sea changes in public mood," said Laura Behrens, senior media analyst at Gartner/G2. "My impression is that Congress wants to hold the current rules."
Over the next few weeks, there will be a showdown between members of Congress that want to scrap the FCC's new rules entirely and those that want to restore just the 35% cap.
Many lawmakers are far more troubled about local market cross-ownership permitted under the new FCC rules than the decision to move the national ownership cap to 45%.
At a Senate Appropriations Committee hearing last Thursday, the split became obvious when chairman Stevens — always a force to contend with, due to his control of the purse strings — said he would oppose a Congressional Review Act resolution by Sen. Byron Dorgan (D-N.D.) calling for the total rollback of the FCC's order.
Taking on the FCC's order more broadly would draw the opposition of the National Association of Broadcasters and the Newspaper Association of America, both of which intend to take the FCC to court for failing to scale back cross-ownership rules even further.
Assey, Hollings' aide, called the 35% cap " the most bipartisan piece of the pie."
After Thursday's Senate vote, Sen. John McCain (R-Ariz.), chairman of the Senate Commerce Committee, complained that the Stevens panel usurped power over the FCC from his panel in an apparent attempt to placate the NAB.
In June, McCain's panel passed a bill, co-sponsored by Stevens, that restored the 35% cap and largely restored the TV station-newspaper cross-ownership ban. The NAB announced its opposition to that bill.
"I continue to be mystified by the inconsistency of separating the national television broadcast-ownership cap from the local broadcast limits in legislation—an action that seems only to serve the members of the NAB," McCain said in statement.
Stevens, citing the court stay, indicated he no longer supports his bill that came out of McCain's committee.
"It's process rather than principle right now that I'm talking about, process," Stevens said.
But Sen. Kay Bailey Hutchison (R-Texas) urged Stevens not to turn his back on Dorgan's supporters.
"I hope that you will also give those of us that feel very strongly about the other part of that ruling to be able to have our say," Hutchison said.